ShawnaShawna Neilson Neilson IndonesiaIndonesia International Marketing Project: Indonesia Shawna Neilson Crater School of Business June 21, 2010 Table of Contents - 1 - Shawna Neilson Indonesia Introduction .......................................................................................... 3 Geography ............................................................................................ 4 Economic Analysis............................................................................... 5 Economic Analysis Part II.................................................................... 8 Political System .................................................................................. 11 Trade Laws ......................................................................................... 13 Population........................................................................................... 14 Diet and Nutrition............................................................................... 16 Housing and Communication............................................................. 17 Transportation..................................................................................... 19 Labor................................................................................................... 20 Education............................................................................................ 22 Clothing .............................................................................................. 24 Recreation and Leisure....................................................................... 26 Language ............................................................................................ 27 Religion .............................................................................................. 29 Bibliography ....................................................................................... 30 Appendix ............................................................................................ 34 Current Events.......................................................................... 34 Travel Brochure ....................................................................... 35 Images ...................................................................................... 36 Etiquette ................................................................................... 37 Country Selection Letter .......................................................... 38 Company Profile ...................................................................... 40 - 2 - Shawna Neilson Indonesia Introduction In the pages to come, many topics will be discussed providing an overview of Indonesia. The purpose of the document is to inform the reader of possible business potential in Indonesia while providing a base knowledge. The topics discussed are designed to give the reader an understanding of life and Indonesia. The first section is a geographical analysis. It aims to inform the reader of Indonesia’s topography, climate, as well as how geography may affect a business. The next two sections discuss many parts of Indonesia’s economy ranging from economic classification to currency information. Following economics is a section about the political system of Indonesia. It basically provides a description of the government system and its different parts. Information on trade laws and a legal analysis are provided in the next section. The following sections are mainly about the people. The next section gives statistics and demographic descriptions about the population. Diet and Nutrition is the next section, it basically discusses Indonesian food and eating habits. Housing and transportation are the next two sections. Housing describes the structure of homes in Indonesia as well as giving statistics about urban and rural dwellings. The transportation gives basic information about different modes of public and private transportation. Labor is the next section covered. In this section, statistics are presented about the labor force concerning gender and occupation. The next section topic is education. A description of the education system is provided in addition to statistics about enrollment. The next section covers the clothing of Indonesia. The topic after clothing is recreation and leisure. Descriptions about some of the most common recreational activities are provided in this section as well as basic travel information on entering and exiting Indonesia. The last two topics are language and religion. Language presents the official language as well as minor languages in addition to some statistics. Religion, the final section covers the major religions in Indonesia and provides some statistical information. When choosing a country, I thought of countries that I have personal interest in. Indonesia was one of the countries that came to mind because my grandmother was born and raised in Indonesia. I looked at information for all of the countries that I was considering. In doing so, I learned that Indonesia is a fabulous place for tourism, as there are many tourist attractions. Indonesia is a beautiful country and would be fabulous for a tourism business. - 3 - Shawna Neilson Indonesia Geography Indonesia is an island country consisting of over 13,000 islands. 6,000 of these islands are inhabited. Although the overall land area is only 1,192,608 square miles (1,919,317 square kilometers), it would be easy to establish a franchise throughout this island country. Indonesia can be found north of Australia and South of the Philippines and Malaysia. The easiest methods for product distribution between islands would be either ship or aircraft. Within each island, products can be distributed by land or aircraft. There are many distribution methods available based upon the location of distribution points. It would be easy to transport products to other countries such as Thailand, Malaysia, Australia, the Philippines, as well as China, Japan, and many others because these countries are fairly close and the waterways offer an easy travel route. One of the down sides Indonesia being an island country is that there would be some distance between locations on different islands. Overall, the location could serve useful in product distribution. Rainfall is the most variable aspect of Indonesia’s climate. Since the country is surrounded by warm waters, temperatures remain fairly constant with a high humidity. Throughout the country, temperatures range from approximately 73˚F to 82˚F. Indonesia is mostly tropical because it is divided by the equator. The tropical climate would be good for setting up a business in tourism. For the most part, winds are moderate and tend to be predictable. Unfortunately, monsoons are fairly regular. During June through September, they can be expected to blow in from the south and east. During December through March, they can be expected to come from the northwest. Although storms can be serious, they are dealt with frequently and therefore precautions can be taken to prevent damage. Indonesia’s islands follow a similar pattern in relation to topography. The larger islands have lowlands and costal plains that surround central mountain ranges. Indonesia has over 100 volcanoes, some active others inactive. Rich volcanic soil is carried down from volcanic slopes by rivers and into the lowlands and costal plains. For this reason, rich volcanic soil is predominate in Indonesia. Due to this, Indonesia is strong agriculturally. Also, Indonesia has many mineral deposits, which provides for excellent mining. Indonesia’s petroleum deposits has allowed for the country to be one of the leading petroleum producers. - 4 - Shawna Neilson Indonesia Overall, this archipelago country is surrounded by warm waters and has a tropical climate. The larger islands are characterized by central mountain ranges rising from lowlands and coastal plains. There are many volcanoes and the soil is very fertile. Indonesia has many mineral and petroleum deposits. This island country would be great for establishing a franchise. There could be business locations scattered amongst the islands. The tropical climate is great for a tourism business. Economic Analysis Socialism The government plays a significant role in the Indonesian economy, therefore making it socialist. The government does not regulate prices on all goods, but it does on some such as fuel, rice, and electricity. Starting in the 1980s, the government began removing some economic regulations in hope of stimulating employment and growth, mainly in the non- oil export sector. Throughout the last few years, Indonesia has been able to maintain a fairly steady economy and has weathered the global crisis with some level of ease. Even through the financial crisis, Indonesia has been able to maintain GDP growth. Non-Renewable Resources Crude Oil – Unrefined petroleum taken from the ground, it is refined and used for fuel. Crude oil is Indonesia’s largest export commodity. Natural Gas – Combustible substance that is formed in rocks, it is used for fuel and also one of Indonesia’s top export commodities. Bauxite – Claylike mineral containing aluminum Silver – Mineral that is commonly used for jewelry, coins, electronics, and photography Tin – Metallic mineral mainly used to coat other metals in order to prevent corrosion. Copper – Reddish brown, metallic mineral that is a great conductor of heat and electricity. It is commonly used in electrical wires, water pipes, and to make corrosion resistant parts.